State Farm wants rate increase on La. homes

State Farm Fire and Casualty Co., the state's
largest residential insurer, is asking for an average 9.9 percent rate
increase for homeowners coverage in Louisiana.

The filing with the
Department of Insurance comes just over a month after Insurance
Commissioner Jim Donelon rejected the company's request for an average
19.1 percent rate hike. Donelon called that proposal unreasonable and
unjustified.

State Farm received an average 8.3 percent increase
last year in Louisiana after asking for 13.7 percent.

Although the
average rate hike would be 9.9 percent, hurricane-vulnerable coastal
areas would bear the brunt. The New Orleans region would see a 17.7
percent increase while rates in the Lake Charles region would go up 22.5
percent, said State Farm spokeswoman Brooke Cluse.

Alexandria
homeowners could expect a 5.5 percent increase. Rates in the Monroe and
Baton Rouge areas would be unchanged, while the Shreveport-Bossier City
area would see rates go down 6 percent.

The largest overall
increase -- 26 percent -- would affect homeowners in St. James and St.
John the Baptist parishes, including LaPlace. The largest overall
decrease -- 6.7 percent -- would be seen in Assumption, Iberia, St.
Charles and Vermilion parishes.

Cluse said the proposed rates are
based on future loss projections and not past claims experience. She
said that although State Farm believed its earlier rate increase request
was justified, the company was trying to work with regulators to "move
closer to adequate rates."

In denying the earlier request, Donelon
questioned State Farm's use of a loss projection model that called for
150 percent higher loss provisions than projected by two other industry
models. He said State Farm did not provide enough evidence to support
the difference.

Donelon was not available for immediate comment
Tuesday on the new request.

The filing, which would total $38.1
million for State Farm's 301,000 policyholders, also includes a proposed
6.1 percent rate increase for condominium owners coverage and a 0.4
percent hike for rental coverage.

If granted, the higher rates
would go into effect on May 1 for new policies and on July 1 for renewed
policies.